Dear Dave
My husband and I are thinking about selling our house. We were at a BBQ this past weekend and got on the topic with our friends and they told us that during the election cycle is one of the worst times to think about buying or selling a home. They’re not Realtors but have bought and sold a bunch of properties which has us thinking maybe they are right!? We wanted to know what your thoughts are as we’ve enjoyed reading your articles for a long time and appreciate your point of view and candor.
Sylvia & George
Fruita
Sylvia & George,
Here we go with Week 2! Last week we determined that sales slowed and interest rates fell leading up to Presidential elections which leads to a mixed bag of results as a best case scenario, but what happens after election day and does it matter which party wins the White House? Well if historical trends hold, we are headed to positive news where real estate is concerned and I for one will take all the positive vibes we can get with the state of the world right now!
According to the HUD (Housing and Urban Development) and the National Association of Realtors home sales have increased the year after 9 of the past 11 Presidential elections!
In fact the data also indicates that the sales lost due to the slower number of sales during the election year are recovered the year after those elections. So what it amount to is a temporary hiccup in the market as many people choose to take a “wait and see” approach leading up to the elections. Based on the data….the “wait and see” approach might actually cost you money in the long run!
Why would the “wait and see approach” cost you money? Because, according to the National Association of Realtors, home prices have seen increases the year after an election 7 out of the past 8 cycles with the lone outlier being the financial crisis of 2008/2009 when prices would have dropped and were rapidly dropping due to the economic climate. Also note the rather large price increase in 2021….undoubtably directly related more to Covid than any election.
Ultimately if you are just looking at data we could agree that home sales slow leading up to an election and interest rates decline. After the election home sales increase, as do prices so I think overall one could argue that buying a new home is a good idea leading up to an election and maybe, just maybe, you should wait till the following year to sell….if you believe statistics. I for one think it is more of a hiccup that warrants little concern, other than as a seller you might need to be a bit more patient and as a buyer, you might want to jump at little bit of a lower interest rate!
Great Question you guys…..Thank you for helping me set the record straight! : )